Tracker mortgages back in fashion

Published: April 09, 2008

Britons are less keen on taking out fixed-rate mortgages because they expect the base rate of interest to fall.

New research from the Council of Mortgage Lenders (CML) reveals that the number of people taking out such deals fell in February.

A total of 52 per cent of all borrowers took out fixed-rate mortgages in the month, the lowest level since March 2005.

Tracker-rate mortgages benefited from the change in attitude, rising from 33 per cent of the market in January to 35 per cent in February.

Michael Coogan, director general of the CML, said that the promise of reduced interest rates has played a big part in the resurgence of tracker-rate mortgages.

"The trend away from fixed-rate products continues as expectations of further Bank base rate reductions, probably starting this week, have increased," he commented.

The Bank of England's Monetary Policy Committee is due to meet again tomorrow (April 10th), with many analysts forecasting a reductionto the base rate of interest.